Investors last week rushed to dump the hybrid estate agent after analysts at Jefferies disputed its sales claims.
Research by the city firm suggested that Purplebricks conversion is not at 78%, but closer to 52% – a claim the agent has vehemently denied.
Purplebricks said Jefferies analysis had numerous holes in it, including that it did not take account of properties that have completed but not been uploaded to the Land Registry.
In a statement it said: “Purplebricks firmly refutes the criticism in the research note of its revenue recognition policy and stands behind both the fully audited results and the accounting policy itself.”
The hybrid estate agent charges sellers a flat fee, whether the home is sold or not – unlike traditional agents that charge a percentage based on a property’s selling price.
Never made a profit
Purplebricks is expanding into Australia and the US and has a stock market valuation of more than £1bn.
Despite never making a profit, the agent reported that revenue jumped by 150% between May and October last year.
Famed investment manager Neil Woodford is one of Purplebrick’s biggest backers.
The company was one of the Woodford Equity Income Fund’s star performers an update at the end of last year showed.
In a statement at that time Woodford Investment Management said Purplebricks interim results “showcased the very positive progress it is making across the board”.
And it added: “The management of this impressive young business continues to execute its ambitious growth plans successfully, with expansion in Australia very much on track and an encouraging start to trading in the US.”
Ken Odeluga, market analyst at City Index, said: “With full-year trading expectations having been met, according to last week’s interim update, investors are likely to go with the Purplebrick’s version of events for the time being, and will scrutinise performance in the remainder of the year ending 30th April.
“At that time, the group will also have an opportunity to provide further clarity on differential performance metrics.
“Namely, successful sales vs. instructions and a more up to date instruction-to-sales conversion rate.
“Confirmation that the conversion rate is almost 80% would go a long way to silencing critics.”